U.S. SECURITIES AND EXCHANGE COMMISSION

FORM 10-QSB

(Mark One)

[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES

For the quarterly period ended:	September 30, 2002

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES

For the transition period from _____to _____

Commission file number 0-17232

FACT CORPORATION



|COLORADO(State or other jurisdiction ofincorporation or organization) | 84-0888594(IRS EmployerIdentification No.)
|--------------------------------------------------------------------- | ------------------------------------------

1530 9th Ave S.E.,

(403) 204-0260

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X	No

State the number of shares outstanding of each of the issuer's classes of common equity, as of the las practicable date:

7,422,656 shares of Class A common stock, no par value, as of November 7, 20022,000,000 shares of Class C common stock, no par value, as of November 7, 2002

Transitional Small Business Disclosure Format (check one):	Yes  No X

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-QSB and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the nine month periods ended September 30, 2002 and 2001 are not necessarily indicative of the results that may be expected for the year ending December 31, 2002. For further information refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2001.

|                                                     | Page   
|---------------------------------------------------- | -------
|                                                     |        
|Unaudited Consolidated Financial Statements          |        
|Balance Sheets                                       | 3      
|Statements of Operations                             | 4      
|Statements of Cash Flows                             | 5      
|Statements of Stockholders' Equity                   | 6 to 7 
|Notes to Unaudited Consolidated Financial Statements | 8 to 10

2

FACT CORPORATION (formerly Capital Reserve Corporation)

|                                                                                                                                | September 30, 2002 | December 31, 2001
|------------------------------------------------------------------------------------------------------------------------------- | ------------------ | -----------------
|                                                                                                                                |                    | (Unaudited)      
|ASSETS                                                                                                                         
|Current Assets                                                                                                                  |                    |                  
|Cash                                                                                                                            | $                  | 103,603          
|Inventory                                                                                                                       |                    | 7,835            
|Accounts receivable                                                                                                             |                    | 13,662           
|Loans receivable (related party)                                                                                                |                    | 139,396          
|Prepaid expenses and deposits                                                                                                   |                    | 114,659          
|Total Current Assets                                                                                                            |                    | 379,155          
|                                                                                                                                |                    |                  
|Investment in Texas T Companies                                                                                                 |                    | 140,389          
|Investment in Terra Nostra Resources Limited                                                                                    |                    | 10               
|                                                                                                                                |                    |                  
|Property and Equipment                                                                                                          |                    |                  
|Intellectual property                                                                                                           |                    | 2,540,000        
|Oil & gas leases (net of accumulated depletion of $24,838)                                                                      |                    | 82,585           
|Real Property (net of accumulated depreciation of $143,009 in 2002 and $86,402 in 2001)                                         |                    | 2,242,449        
|Office and development equipment (net of accumulated depreciation of $20,933 for 2002 and $14,018 in 2001)                      |                    | 44,748           
|Total Property and Equipment                                                                                                    |                    | 4,909,782        
|Total Assets                                                                                                                    | $                  | 5,429,336        
|                                                                                                                                |                    |                  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                           
|                                                                                                                                |                    |                  
|Current Liabilities                                                                                                             |                    |                  
|Accounts payable                                                                                                                | $                  | 230,506          
|Acquisition cost payable                                                                                                        |                    | 150,000          
|Accrued expenses                                                                                                                |                    | 117,541          
|Investors deposits                                                                                                              |                    | 5,000            
|Loans payable (related parties)                                                                                                 |                    | 895,357          
|Loan payable                                                                                                                    |                    | 400,435          
|Current portion of long-term debt                                                                                               |                    | 48,062           
|Total Current Liabilities                                                                                                       |                    | 1,846,901        
|                                                                                                                                |                    |                  
|Long Term Liabilities                                                                                                           |                    |                  
|Acquisition cost payable                                                                                                        |                    | 1,850,000        
|Future site restoration                                                                                                         |                    | 1,433            
|Long-term debt                                                                                                                  |                    | 1,238,908        
|Total Liabilities                                                                                                               | $                  | 4,937,242        
|Commitments and contingencies                                                                                                   |                    |                  
|Stockholders' Equity                                                                                                            |                    |                  
|Class A Common Stock - authorized 100,000,000 shares of no par value; 7,422,656 issued and outstanding as at September 30, 2002 |                    | 6,368,574        
|Class C stock - authorized 2,000,000 shares of no par value;
	2,000,000 issued and outstanding as at September 30, 2002         |                    | 540,000          
|Class A Common stock warrants                                                                                                   |                    | 338,039          
|Accumulated deficit                                                                                                             |                    | (6,581,640)      
|Accumulated other comprehensive (loss)                                                                                          |                    | (172,879)        
|Total Stockholders' Equity                                                                                                      |                    | 492,034          
|Total Liabilities and Stockholders' Equity                                                                                      | $                  | 5,429,336        

The accompanying notes are an integral part of these unaudited financial statements

3

FACT CORPORATION (formerly Capital Reserve Corporation)Consolidated Statements of Operations (Unaudited)

|                                                             |   | For the Three Months Ended September 30, |   | For the Nine Months Ended September 30,
|------------------------------------------------------------ | - | ---------------------------------------- | - | ---------------------------------------
|                                                             |   | 2002                                     |   | 2001                                   
|                                                             |   |                                          |   | Restated                               
|Revenues                                                     |   |                                          |   |                                        
|Petroleum & natural gas (net of royalties)                   | $ | 18,533                                   | $ | 28,460                                 
|Functional food premix                                       |   | 450                                      |   | ---                                    
|Rental income                                                |   | 73,325                                   |   | 60,487                                 
|                                                             |   | 92,308                                   |   | 88,947                                 
|                                                             |   |                                          |   |                                        
|Costs and Expenses                                           |   |                                          |   |                                        
|Petroleum & natural gas related cost (including depletion)   |   | 16,913                                   |   | 23,878                                 
|Functional food premix                                       |   | 248                                      |   | ---                                    
|Legal                                                        |   | 23,255                                   |   | 20,625                                 
|Consulting fees                                              |   | 209,240                                  |   | 88,198                                 
|Directors fees                                               |   | ---                                      |   | (15,510)                               
|Depreciation and amortization                                |   | 17,199                                   |   | 16,619                                 
|Administrative expenses                                      |   | 63,998                                   |   | 22,191                                 
|                                                             |   | 330,853                                  |   | 156,001                                
|                                                             |   |                                          |   |                                        
|(Loss) from operations                                       |   | (238,545)                                |   | (67,054)                               
|                                                             |   |                                          |   |                                        
|Other income and expenses                                    |   |                                          |   |                                        
|Other Income                                                 |   | 643                                      |   | ---                                    
|Equity in Texas T Petroleum Ltd                              |   | (114,412)                                |   | 149,549                                
|Interest income                                              |   | 16,714                                   |   | 3,820                                  
|Interest expense                                             |   | (40,047)                                 |   | (36,147)                               
|Gain on disposal                                             |   | 10                                       |   | ---                                    
|Gain on exchange of shares                                   |   | ---                                      |   | 35,893                                 
|                                                             |   | (137,092)                                |   | 153,115                                
|                                                             |   |                                          |   |                                        
|Provision for income taxes                                   |   | ---                                      |   | ---                                    
|                                                             |   |                                          |   |                                        
|Net (Loss)                                                   | $ | (375,637)                                | $ | 86,061                                 
|                                                             |   |                                          |   |                                        
|Net (Loss) per Common Share                                  | $ | (0.05)                                   | $ | 0.01                                   
|                                                             |   |                                          |   |                                        
|Weighted Average Number of Common Shares Used in Calculation |   | 7,320,962                                |   | 6,864,235                              
|                                                             |   |                                          |   |                                        
|Other comprehensive income                                   |   |                                          |   |                                        
|Net loss                                                     | $ | (375,637)                                | $ | (63,488)                               
|Foreign currency translation adjustment                      |   | (24,800)                                 |   | 59,917                                 
|Unrealized profit (loss) on marketable securities            |   | (60,235)                                 |   | ---                                    
|Total other comprehensive income                             | $ | (460,672)                                | $ | (3,571)                                

The accompanying notes are an integral part of these unaudited financial statements

4

FACT CORPORATION (formerly Capital Reserve Corporation)Consolidated Statements of Cash Flows (Unaudited)

|                                            | Nine months ended 
|------------------------------------------- | ------------------
|                                            | September 30, 2002
|Cash From Operating Activities:             |                   
|(Loss) from continuing operations           | $                 
|Reconciling adjustments                     |                   
|Depreciation and amortization               |                   
|Equity in Texas T Petroleum Ltd             |                   
|Services paid by Stock Issuance             |                   
|Gain on disposal                            |                   
|Changes in operating assets and liabilities |                   
|Inventory                                   |                   
|Accounts receivable                         |                   
|Prepaid expenses and deposits               |                   
|Accounts payable and accrued expenses       |                   
|Net Cash Flows From Operating Activities    |                   
|                                            |                   
|Cash From Investing Activities:             |                   

|Acquisition of property and equipment             |   | (8,716)  |   | (87,839) 
|------------------------------------------------- | - | -------- | - | ---------
|Investment in Texas T Companies                   |   | ---      |   | (31,931) 
|Proceeds from (payments to) loans receivable      |   | 39,360   |   | 129,203  
|Net Cash Flows From Investing Activities          |   | 30,644   |   | 9,433    
|                                                  |   |          |   |          
|Cash From Financing Activities:                   |   |          |   |          
|Loans payable                                     |   | 236,973  |   | 197,709  
|Repayment of long term debt                       |   | (24,179) |   | (116,711)
|Proceeds from loans payable (related parties)     |   | 317,635  |   | 26,637   
|Sales of common stock (net of offering costs)     |   | 1,275    |   | ---      
|Investor deposits                                 |   | 5,000    |   | ---      
|Capital contribution by an officer                |   | 5,499    |   | ---      
|Net Cash Flows From Financing Activities          |   | 542,203  |   | 107,635  
|                                                  |   |          |   |          
|Foreign currency translation adjustment           |   | 3,722    |   | 73,996   
|Net change in cash and cash equivalents           |   | 73,013   |   | 1,931    
|Cash at beginning of period                       |   | 30,590   |   | 20,909   
|                                                  |   |          |   |          
|Cash at end of period                             | $ | 103,603  | $ | 22,840   
|Supplemental disclosure of cash flow information: |   |          |   |          
|Interest paid                                     | $ | 113,456  | $ | 104,302  
|Income taxes paid                                 | $ | ---      | $ | ---      

The accompanying notes are an integral part of these unaudited financial statements

5

FACT CORPORATION (formerly Capital Reserve Corporation)Consolidated Statements of Shareholder's Equity (Unaudited)

|                                                 |  | Class A Common Stock |   | Class C Stock |  | Warrants  |   | Accumulated |  | Accumulated
Other Comprehensive |   | Total
Shareholders
|------------------------------------------------ |  | -------------------- | - | ------------- |  | --------- | - | ----------- |  | ------------------------------- | - | ------------------
|                                                 |  | Shares               |   | Amount        |  | Shares    |   | Amount      |  | Shares                          |   | Amount            
|Balance at December 31, 2000(Restated)           |  | 6,864,235            | $ | 6,128,671     |  | ---       | $ | ---         |  | 1,698,090                       | $ | 323,680           
|Acquisition of Food and Culinary Technology
Inc. |  | ---                  |   | ---           |  | 2,000,000 |   | 540,000     |  | ---                             |   | ---               
|Sales of Common Stock                            |  | 53,333               |   | 25,641        |  | ---       |   | ---         |  | 53,333                          |   | 14,359            
|Value of stock options issued to consultant      |  | ---                  |   | 57,045        |  | ---       |   | ---         |  | ---                             |   | ---               
|Capital Contribution
by officer                  |  | ---                  |   | 6,214         |  | ---       |   | ---         |  | ---                             |   | ---               
|Net loss for the year                            |  | ---                  |   | ---           |  | ---       |   | ---         |  | ---                             |   | ---               
|Foreign currency translation adjustment          |  | ---                  |   | ---           |  | ---       |   | ---         |  | ---                             |   | ---               
|Unrealized (loss) on marketable securities       |  | ---                  |   | ---           |  | ---       |   | ---         |  | ---                             |   | ---               

Continued on next page

The accompanying notes are an integral part of these unaudited financial

6

...continued from page 6

FACT CORPORATION (formerly Capital Reserve Corporation)

|                                                                         |  | Class A Common Stock |   | Class C Stock |  | Warrants  |   | Accumulated |  | Accumulated
Other Comprehensive |   | Total
Shareholders
|------------------------------------------------------------------------ |  | -------------------- | - | ------------- |  | --------- | - | ----------- |  | ------------------------------- | - | ------------------
|                                                                         |  | Shares               |   | Amount        |  | Shares    |   | Amount      |  | Shares                          |   | Amount            
|Balance at
December 31, 2001                                             |  | 6,917,568            | $ | 6,217,571     |  | 2,000,000 | $ | 540,000     |  | 1,751,423                       | $ | 338,039           
|Sale of common stock                                                     |  | 1,700                |   | 1,275         |  | ---       |   | ---         |  | ---                             |   | ---               
|Issue of shares for services                                             |  | 324,176              |   | 182,989       |  | ---       |   | ---         |  | ---                             |   | ---               
|Capital Contribution by Officer                                          |  | ---                  |   | 5,499         |  | ---       |   | ---         |  | ---                             |   | ---               
|Net Loss for the period                                                  |  | ---                  |   | ---           |  | ---       |   | ---         |  | ---                             |   | ---               
|Foreign currency translation adjustment                                  |  | ---                  |   | ---           |  | ---       |   | ---         |  | ---                             |   | ---               
|Unrealized loss on marketable securities                                 |  | ---                  |   | ---           |  | ---       |   | ---         |  | ---                             |   | ---               
|Elimination of shares of FACT Corporation held by Texas T Petroleum Ltd. |  | (80,750)             |   | (38,760)      |  | ---       |   | ---         |  | ---                             |   | ---               
|                                                                         |  | 7,162,694            | $ | 6,368,574     |  | 2,000,000 | $ | 540,000     |  | 1,751,423                       | $ | 338,039           

The accompanying notes are an integral part of these unaudited financial statements

7

FACT CORPORATION (formerly Capital Reserve Corporation)Notes to the Unaudited Financial StatementsSeptember 30, 2002

Note 1 - Management's Statement

The financial statements included herein have been prepared by FACT Corporation (the "Company") without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted as allowed by such rules and regulations, and the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the December 31, 2001, audited financial statements and the accompanying notes included in the Annual Report on Form 10-KSB. While management believes the procedures followed in preparing these financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year.

The management of the Company believes that the accompanying unaudited financial statements contain all adjustments (including normal recurring adjustments) necessary to present fairly the operations and cash flows for the periods presented.

The financial statements for prior periods have been re-stated to reflect the change in the accounting treatment of the investment in Texas T Petroleum Ltd. to the equity method, see Note 4.

Note 2 - Summary of Significant Accounting Policies

Organization and Operations

The Company was incorporated under the laws of the State of Colorado on August 3, 1982 for the purpose of operating as a financial services holding company. In 1983, the Company formed a wholly-owned subsidiary, Wall Street Investments Corp., a Colorado corporation, ("WSIC").In December 1999, the Company formed a wholly owned subsidiary, Capital Reserve Canada Limited, an Alberta corporation, ("Capital Canada"), to locate and acquire producing oil and gas assets in Canada. On November 7, 2001 the Company entered into a Share Exchange Agreement with the shareholders of Food and Culinary Technology Group Inc., a Nevada corporation, ("FACT Group"), whereby all of the issued and outstanding shares of FACT Group were exchanged for 2,000,000 shares of the Company's Class C common stock. On July 23, 2002, the Company incorporated Wall Street Real Estate Investments Ltd., an Alberta corporation ("Wall Street Canada") to hold certain of the Company's real estate assets.

At September 30, 2002, the Company has four wholly owned subsidiaries, Wall Street Canada, WSIC, Capital Canada and FACT Group. FACT Bread Company Inc., a Nevada corporation, was incorporated in November 2001 and is a wholly owned subsidiary of FACT Group.

The Company owns and leases real property in the City of Calgary, Alberta, Canada. The Company also owns an interest in a producing oil and gas property located in Alberta, Canada. The Company entered the functional food industry in November 2001 with the acquisition of FACT Group. The Company began to realize minimal revenue from its operations in this industry during the quarter ended September 30, 2002, and expenses related to these operations were generally limited to those incurred in the pursuit of supplier contracts and commercial licensing agreements for FACT Group's existing line of functional food formulations.

8

FACT CORPORATION (formerly Capital Reserve Corporation)Notes to the Unaudited Financial StatementsSeptember 30, 2002

Note 3 -Loans Payable (related parties)

Loans Payable outstanding are advances from various related parties that have the following terms:

|Repayment terms  |  | Interest rate             |   | September 30, 2002 |   | December 31, 2001
|---------------- |  | ------------------------- | - | ------------------ | - | -----------------
|Within 12 months |  | US prime + 1%             | $ | 85,066             | $ | 81,582           
|Within 12 months |  | Bank of America prime +2% |   | 21,205             |   | 20,195           
|Within 12 months |  | 10%                       |   | 509,846            |   | 229,541          
|Within 12 months |  | 8%                        |   | 24,059             |   | ---              
|Demand           |  | Bank of Canada prime + 2% |   | 148,362            |   | 141,214          
|Demand           |  | US prime + 2%             |   | 109,988            |   | 105,190          
|                 |  |                           | $ | 898,526            | $ | 577,722          

All loans are unsecured, however, the Company is currently negotiating with certain lenders with respect to their request for provision of security over certain of the outstanding amounts noted above. The Company would expect to provide security in the form of second charges over certain commercial real estate properties.

Note 4 -Purchase and Sale Agreement (Heavy Oil Technology) and Investment in Texas T Petroleum Ltd.

On March 8, 2002 the Company completed a Purchase and Sale Agreement (the "Agreement") in conjunction with Texas T Petroleum Ltd. ("Petroleum") and certain other third parties whereby Petroleum agreed to sell its primary asset, a 50% interest in a heavy oil upgrading technology ("CPJ"), to a third party in consideration for shares of the third party's common stock. As a result of the Agreement, a contingent liability assumed by the Company in September 2000, arising from an obligation to provide certain additional consideration to the inventor of CPJ, was assumed by a third party with no further obligation to the Company.

Under the terms of the Agreement, certain third parties agreed to return their shareholdings in Petroleum to the treasury for cancellation, increasing the Company's percentage ownership of Petroleum from 13.9% to 16.2%. Taking into consideration the Company's indirect interest in Petroleum through ownership of a 9% interest in Texas T Resources Inc., a publicly traded Alberta corporation, ("Resources"), and the controlling shareholder of Petroleum, as well as other factors, the Company has determined that it has significant influence over Petroleum sufficient to cause it to begin accounting for its investment in Petroleum using the equity method.

In accordance with APB 18, the investment in Petroleum, results of operations and accumulated deficit have been retroactively adjusted for all periods presented. For September 30, 2001 the net loss for the nine months changed from $132,853 to a profit of $18,708.

9

FACT CORPORATION (formerly Capital Reserve Corporation)

Note 5 - Investment in Texas T Companies (Texas T Resources Inc. and Texas T Petroleum Ltd.)

In accordance with the Statement of Financial Accounting Standards No. 115 (SFAS 115), investments and securities may be classified as (1) Securities held-to-maturity, (2) Trading securities or (3) Securities available for sale. The Company considers these securities to be securities available for sale, and, in accordance with SFAS 115, they are valued at fair value with unrealized gains or losses recorded in stockholders' equity.

As of December 31, 2001, the Company owned 1,347,748 units of Resources (each unit comprised of one common share and one share purchase warrant entitling the Company to purchase one additional common share at $0.0880 for a period of two years from the date of issue). The share purchase warrants expired unexercised on September 25, 2002. As of September 30, 2002 the Company owns 1,347,748 shares of Resources, which were recorded at a value of $76,259 as of December 31, 2001 and $17,070 as of September 30, 2002, based on the quoted market price of the stock at those dates.

As of December 31, 2001 and September 30, 2002, the Company owns 306,101 common shares and a warrant to acquire an additional 200,000 common shares of Petroleum up to October 31, 2002. As explained in Note 4, the Company accounts for this investment under the equity method. This interest has been recorded at $400,000 and $123,311 at of December 31, 2001 and September 30, 2002 respectively.

Aggregate fair value for these securities is $476,259 at December 31, 2001 and $140,389 at September 30, 2002. Unrealized loss of marketable securities was $8,474 at December 31, 2001 and $60,235 at September 30, 2002.

10

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

Certain information in this report, including the following discussion, may include forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. The Company intends the disclosure in these sections and throughout this report on Form 10-QSB to be covered by the safe harbor provisions for forward-looking statements. All statements regarding the Company's expected financial position and operating results, its business strategy, its financing plans, and the outcome of any contingencies are forward-looking statements. These statements can sometimes by identified by the Company's use of words such as "may", "believe", "plan", "will", "anticipate", "estimate", "expect", "intend", and other phrases of similar meaning. Known and unknown risks, uncertainties and other factors could cause the actual results to differ materially from those contemplated by the statements. The forward-looking information is based on various factors and was derived using numerous assumptions.

Plan of Operation

At present, based on current operations, the Company does not have sufficient cash and liquid assets to satisfy its cash requirements on a monthly basis. While the Company does generate both rental income and income from producing oil and gas properties on a monthly basis, and has recently commenced generating minimal revenue from its functional food operations, these proceeds are not sufficient to meet the Company's current monthly overhead, which includes the on-going business of three operational subsidiaries. The Company will require approximately $3.6 million to cover its anticipated overhead, operational needs and meet debt servicing and loan repayment terms for the upcoming twelve month period ending September 30, 2003. Revenues generated from existing operations for the twelve month period ended September 30, 2003 are expected to offset operational overhead by approximately $1.08 million, which amount includes projected net revenues of $787,000 from its functional food business for the upcoming twelve months. Revenues from the functional food business commenced during the month of September 2002. While the Company has projected net revenues from its functional foods operations of approximately $787,000 for the twelve months ended September 30, 2003, there is no guarantee these projections will be achieved. Minimal revenues from these operations are anticipated to the end of fiscal 2002, with more substantial sales growth projected to commence during the first quarter of fiscal 2003. Therefore, the Company may be required to raise approximately $3.3 million to meet its projected costs and debt repayment obligations through the upcoming twelve months. The Company expects that it will be able to obtain additional equity and/or debt financing to meet this need, and anticipates there will be additional costs and expenses associated with such measures, the amounts of which are presently unknown.

Results of Operations

Comparison of quarters ended September 30, 2002 and 2001

For the nine month periods ended September 30, 2002 and September 30, 2001 the Company incurred losses of $1,022,879 and $55,288 respectively.

For the nine month period ended September 30, 2002 the losses increased significantly as compared to the same nine month period ended September 30, 2001 as a result of an increase in consulting fees of $383,818 and an increase in administrative expenditures of $172,793. These increased costs occurred primarily as a result of (i) the acquisition in November 2001 of Food and Culinary Technology Group Inc., a Nevada corporation, and its ongoing operations in the functional foods industry, and (ii) expenses associated with the Company's efforts to obtain additional financing and commence public relations activities. Additionally the Company expects consulting fees and administrative expenses incurred during the current fiscal year to be substantially increased over figures reported for comparative periods from the fiscal year ended December 31, 2001 as a result of the continuing operations of Food and Culinary Technology Group Inc. and the ongoing costs which may be required by the parent to source additional financing.

11

Revenues to offset operating expenses decreased slightly over the comparative periods ended September 30, 2002 and 2001 by approximately 3% to $268,830 from $276,789. Over the comparative periods ended September 30, 2002 and 2001 respectively, the Company experienced a substantial reduction in revenues from oil and gas operations of over 41% to $60,426 from $103,830. This decline in revenues is primarily the result of substantially decreased prices per BOE received by the Company on production volume, as well as the undertaking of certain workovers by the operator which suspended production on certain producing wells intermittently during the most recent nine months. Rental income increased from $172,959 to $207,954 over the comparative periods as a result of the commencement of additional rental income, starting March 2002, from a second commercial property. Additionally the Company's functional food operations generated modest initial revenues of $450 to September 30, 2002, which revenues are expected to increase during the balance of the current fiscal year as the Company continues with the sale of premix for functional dough and batter products to its first industry clients.

During the fiscal year ended December 31, 2001 there were certain extraordinary expenses recorded which substantially increased the operating loss for the year. There have been no such similar events during the nine months ended September 30, 2002. During the nine months ended September 30, 2002, the Company recorded a loss of $237,929 with regards to its holdings in Texas T Petroleum Ltd., which company has experienced a dramatic decline in the value of certain equity based assets over the most recent nine months to September 30, 2002. There was no such similar expense to the fiscal year ended December 31, 2001.

Liquidity and Capital Resources

Summary of Working Capital and Stockholders' Equity

As of September 30, 2002, the Company had negative working capital of $1,467,746 and Stockholders' Equity of $492,034 compared with negative working capital of $736,870 and Stockholders' Equity of $1,420,483 as of December 31, 2001. As at September 30, 2001 the Company had negative working capital of $90,894 and Stockholders' Equity of $2,440,663. The reduction to working capital and Stockholders' Equity at September 30, 2002, as compared to the figures reported for the fiscal year ended December 31, 2001 is primarily due to losses from operations incurred during the nine month period, and an increase in current liabilities with the majority of operations being funded by way of related party loans and proceeds from a conventional mortgage on one of the Company's commercial real estate properties. Financing activities during the nine month period resulted in an increase to loans payable from related parties of $317,635 from figures reported at the year ended December 31, 2001. Additionally accrued expenses included in current liabilities at September 30, 2002 increased by $57,995 as compared to figures reported as at December 31, 2001. Accounts payable reported at September 30, 2002 increased substantially from $152,464 reported as at the fiscal year ended December 31, 2001 to $230,506 as at September 30, 2002, primarily as a result of the ongoing operations of Food and Culinary Technology Group Inc. The substantial reduction to working capital and Stockholders' Equity for the comparative periods ended September 30, 2002 and 2001 is for the most part the result of the acquisition of certain commercial real estate assets, leasehold improvements thereto, and the acquisition of subsidiary, Food and Culinary Technology Group Inc. subsequent to the quarter ended September 30, 2001, which greatly increased both the Company's current and long term liabilities. The majority of the Company's financing activities subsequent to September 30, 2001 have been by way of loans and advances from certain related parties, and proceeds from a mortgage against one of the Company's commercial properties in the amount of $292,723 (CDN$462,000), as opposed to the completion of further equity financings, further impacting the Company's working capital position.

The Company was unable to obtain additional capital investment in amounts sufficient to fund operating losses and cash used as described in our financial statements for the period ended September 30, 2002.

Liquidity

The Company will require additional capital up to $5.0 million over the next three years to fully implement our business plan, which includes significant marketing efforts, the continued development and refinement of functional food formulations, a consumer awareness and public relations campaign, development, manufacturing and distribution of a line of our own food products or direct marketing under a master brand, expanded management resources and support staff, and other day to day operational activities. To the date of this report the Company has been successful in raising funds required to meet our existing shortfall for the funding of our operations. Funds have been raised through private loans, equity financing and conventional bank debt. The Company anticipates revenues generated from its functional food business which commenced in the third quarter of this fiscal year will reduce the requirement for additional funding to cover expenses associated with the Company's operations; however, we cannot be certain the Company will be successful in achieving substantial revenues from those operations. Furthermore the Company cannot be certain that we will be able to raise any additional capital to fund our ongoing operations.

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Sources of Working Capital

During the nine month period ended September 30, 2002 the Company's primary sources of working capital have come from revenues generated from our commercial rental properties and the net proceeds from private loans in the amount of $317,635, bearing interest at various rates and due and payable within the next twelve months. Additionally, during the most recently completed quarter ended September 30, 2002, Wall Street Canada obtained a mortgage in the amount of $292,723 (CDN$462,000) which proceeds were allocated to ongoing operations of the Company and its subsidiaries.

The Company is actively pursuing the divestiture of its oil and gas properties by way of a spin off of shares of Capital Canada to current shareholders on a pro-rata basis, a further re-financing of its commercial properties, and the divestiture of the marketable and non-marketable securities. Additionally the Company, through its wholly owned subsidiary, Food and Culinary Technology Group Inc., is working to finalize and enter into additional supply and/or licensing agreements, presently under negotiation, for the provision of functional food premixes to clients established in the food industry. The launching of functional food products with these licensees is expected to continue to generate cash flow to the end of the current fiscal year and beyond. The Company expects these efforts, if successful, will provide the Company with additional cash resources to advance the fulfillment of our stated objectives.

Prior to its acquisition by the Company, Food and Culinary Technology Group Inc. had entered into an agreement to acquire certain intellectual property, formulas, patent rights and other intangible assets owned by F.A.C.T. Group LLC, a New Jersey limited liability company, for $2,000,000 to be paid in cash pursuant to terms described as follows. A portion of the cash consideration becomes due and payable based upon Food and Culinary Technology Group Inc. receiving certain capitalization from the Company. The remainder is payable by way of royalty payments on sales of product. A payment of $20,000 is to be made to F.A.C.T. Group LLC upon Food and Culinary Technology Group Inc. receiving capitalization of $500,000. Upon additional capitalization of $2.5 million, for total cumulative capitalization of $3.0 million, a further $40,000 will be paid to F.A.C.T. Group LLC. Additionally, royalty payments on the sales of products will be paid until a total of $2,000,000 (including the $60,000 in payments described above) is received by F.A.C.T. Group LLC. The $2,000,000 has been recorded as an accounts payable in the Company's financial statements included herein.

Report of Management's Responsibility

The Company's sole executive officer, Ms. Jacqueline Danforth, who serves as the Company's principal executive officer and principal accounting officer, has implemented the Company's disclosure controls and procedures to ensure that material information relating to the Company is made known to Ms. Danforth. Ms. Danforth has evaluated the effectiveness of the Company's disclosure controls and procedures as of a date within 90 days prior to the filing date (the "Evaluation Date") of this quarterly report.

Based on such evaluation, Ms. Danforth has concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures are effective in alerting her on a timely basis to material information relating to the Company that is required to be included in our reports filed or submitted under the Securities Exchange Act of 1934. Moreover, there were no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of such recent evaluation.

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Prior to the filing date of this quarterly report, the Company had not adopted a complete set of written policies, controls and procedures. The Company is now developing such written document and expects that in the process of such undertaking it will discover internal control policies and practices that the Company should implement and follow that are not part of its current practice.

PART II - OTHER INFORMATION

ITEM 1. 	LEGAL PROCEEDINGS

Not Applicable

ITEM 2.	CHANGES IN SECURITIES

On August 15, 2002, the Company issued a total of 203,388 restricted shares to The National Capital Companies and certain of its affiliates and employees in connection with the execution of a Consulting Agreement entered into between the Company and Independent Financial Consultants Network, a division of The National Capital Companies ("IFCN"). On October 10, 2002 the Company cancelled the Consulting Agreement with IFCN for non-performance and subsequently cancelled all of the 203,388 shares, except for 24,176 shares which had already been delivered to IFCN. For purposes of this report, only that portion of shares delivered to IFCN have been recorded on the financial statements as at September 30, 2002. The 24,176 shares were valued at the market value on August 15, 2002 of $0.62 per share, for an aggregate value of $14,989. The shares were issued for consulting services rendered by IFCN to the Company, prior to cancellation of the Consulting Contract. The issuance of these shares was made pursuant to Section 4(2) of the Securities Act of 1933 as a private offering. No commissions or discounts were paid in connection with this sale.

ITEM 3.	DEFAULT UPON SENIOR SECURITIES

Not Applicable

ITEM 4. 	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not Applicable

ITEM 5.	OTHER INFORMATION

On August 16, 2002, the Company's Secretary resigned due to health concerns. On that same day the Company's Board of Directors appointed Ms. Jacqueline Danforth, the Company's President and Treasurer, as its Secretary.

During the quarter ended September 30, 2002, FACT Group's President and a member of its Board of Directors resigned. FACT Group appointed the Company's President, Ms. Jacqueline Danforth, as acting President. The Company also entered into a Consulting Agreement with Rolf Richter to act as FACT Group's Chief Operating Officer through December 31, 2002. The Company is now negotiating with Mr. Richter for a long-term contract to continue to provide services to FACT Group and act as its COO. Additionally during the quarter ended September 30, 2002 the FACT Group entered into a Consulting Agreement with Michael Baum to act as Vice President Marketing and Sales, which contract has been extended to December 31, 2002. The Company is currently negotiating a long-term contract with Mr. Baum to continue to provide services to FACT Group as Vice President Marketing and Sales.

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ITEM 6.	EXHIBITS AND REPORTS ON FORM 8-K

a. Exhibits and Index of Exhibits - see Exhibit Index below

b. 	Reports on Form 8-K:

On August 30, 2002 the Company filed a current report on Form 8-K with the SEC. This Form 8-K reported under Item 5 the Company's listing on the Frankfurt Stock Exchange.



SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FACT CORPORATION

Date: November 13, 2002

By:/s/ Jacqueline Danforth_____Name: Jacqueline DanforthTitle: President and Director

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SECTION 302 CERTIFICATIONS



I, Jacqueline Danforth, certify that:

1. I have reviewed this quarterly report of FACT Corporation.

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. As the registrant's sole certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and I have:

designed such disclosure controls and procedures to ensure that material information relating to the registrant is made known to me by others within the registrant, particularly during the period in which the quarterly report is being prepared;

evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

presented in this quarterly report my conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation of the Evaluation Date.

5. I have disclosed, based on my most recent evaluation, to the registrant's auditors:

all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weakness in internal controls; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls.

6. I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of my most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 13, 2002

By:/s/ Jacqueline DanforthName: Jacqueline DanforthTitle: President (Principal Executive Officer and Principal Accounting Officer)

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________________________

CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of FACT Corporation (the "Company") on Form 10-QSB for the period ended September 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jacqueline Danforth, President, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date: November 13, 2002.

By:/s/ Jacqueline DanforthName: Jacqueline Danforth
Title: President (Principal Executive Officer)

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EXHIBIT INDEX

|REGULATION S-B NUMBER | EXHIBIT                                                                                                                                                                                               | REFERENCE                                                                                                                                                              
|--------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1                   | Articles of Incorporation, as amended                                                                                                                                                                 | Incorporated by reference to the Exhibits previously filed with Capital Reserve Corporation's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1990 
|3.2                   | Amended Bylaws                                                                                                                                                                                        | Incorporated by reference to the Exhibits previously filed with Capital Reserve Corporation's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1994 
|3.3                   | Articles of Incorporation, as amended                                                                                                                                                                 | Incorporated by reference to the Exhibits previously filed with Fact Corporation's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2001            
|10.1                  | Management Agreement with Mr. Loder                                                                                                                                                                   | Incorporated by reference to the Exhibits previously filed with Capital Reserve Corporation's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1998 
|10.2                  | Lease Agreement dated January 15, 2000 by and between Capital Reserve Canada Limited and 319835 Alberta Ltd.                                                                                          | Incorporated by reference to Exhibit 10.14 previously filed with Capital Reserve Corporation's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1999
|10.3                  | Purchase and Sale Agreement dated March 1, 2000 by and between Capital Reserve Canada Limited and Stone Canyon Resources Limited                                                                      | Incorporated by reference to the Exhibits previously filed with Capital Reserve Corporation's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1999 
|10.4                  | Consulting Agreement dated April 24, 2000 by and between Capital Reserve Corporation and W. Scott Lawler                                                                                              | Incorporated by reference to the Exhibits previously filed with Capital Reserve Corporation's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000.
|10.5                  | Share Exchange Agreement dated November 20, 2001 by and between Capital Reserve Corporation, Food and Culinary Technology Group, Inc. and the shareholders of Food and Culinary Technology Group Inc. | Incorporated by reference to the Exhibits previously filed with Fact Corporation's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2001            
|10.6                  | Lease and Option to Purchase Agreement dated by and between Capital Reserve Corporation and 5 Crowns Investment Corp.                                                                                 | Incorporated by reference to the Exhibits previously filed with Fact Corporation's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2001            
|10.7                  | Third Amendment to Share Exchange Agreement                                                                                                                                                           | Incorporated by reference to the Exhibits previously filed with FACT Corporation's Quarterly Report on Form 10-QSB for the period ended June 30, 2002                  

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